What are some emerging trends in the mortgage lending industry?


What are some emerging trends in the mortgage lending industry?

November 23, 2021
Certified Credit

This is a crowdsourced article. Contributors are not necessarily affiliated with this website and their statements do not necessarily reflect the opinion of this website, other people, businesses, or other contributors.


The mortgage industry has seen drastic changes over the past couple of years during the pandemic. Many of the changes adopted out of necessity have proven to be useful tools in providing a timely and smooth experience for borrowers. What can you expect to see this year? Keep reading to find out what our readers predict for the coming year.

Daniel Carter

Daniel Carter

Daniel Carter, Marketing Manager of Loanx.

Two Trends in Mortgage Lending

Rates Will Rise

The interest rate forecast for 2021 is already out. Mortgage rates have risen for seven weeks in a row. A 30-year fixed mortgage currently costs 3.18%, according to Freddie Mac’s April 1, 2021 survey. In January 2021, the rate was 2.65%, resulting in a strong refinancing volume. The number of homeowners eligible to refinance fell from 18 million to 12.9 million in a month when mortgage rates hit 3%, according to Black Knight.

The number of homeowners eligible to refinance will continue to decline as rates climb, and industry professionals forecast that rates will continue to grow. According to the MBA’s latest forecast, the average 30-year fixed mortgage rate will hit 3.6% by year’s end. This is an increase of nearly 0.4% from Freddie Mac’s April 1 industry survey.

Technology Will Dominate

The industry is expected to have another good year in 2021 despite rising interest rates and falling refinance volumes. Nonetheless, keeping up with the booming mortgage market is vital to your success this year. So, how can you succeed? Technology.

Before the worldwide pandemic, using automation to streamline the mortgage process was a crucial corporate driver. But, with record-breaking mortgage originations expected this year, it’s a must. That’s why mortgage tech adoption is a big trend for 2021. Now is the time to prepare your systems and processes for another prosperous year.

Modern mortgage technology does more than speed up processes. It tracks everything from applications through audits and provides reporting to keep everyone informed, from investors to remote team members. It even helps you maintain the optimum level of capacity for variable volumes.

Edward Mellett

Edward Mellett

Edward Mellett, Founder of Wikijob.uk.

Virtual Experiences and Digital Paperwork

Online vehicle buying, virtual home tours, and practically contactless home transactions are just some of the digital-first advantages that homebuyers have grown accustomed to. Consumers’ preference for digital connections is unlikely to change in the short term due to the epidemic and resulting social distance requirements. It has changed the way people view the homebuying and financing process. Working with lenders who provide an online experience where they can rapidly get pre-approved, lock in their rate, and upload required mortgage papers is a welcome change for many. The old method required many visits to a lender’s office and reams of paper paperwork.

Virtual open houses and home tours using VR or other technologies are examples of the shift to digital. The National Association of Realtors discovered that of purchasers who use the internet to search for homes, 42% considered the virtual tour function very beneficial. Since this research was issued in March 2020, there is still room for progress. Other innovations in the mortgage financing industry include drive-by appraisals and virtual closings.

Gerrid Smith

Gerrid Smith

Gerrid Smith, Chief Marketing Officer at Joy Organicss.

Technological Advances

A growing number of digital lenders are offering services formerly exclusively available to brick-and-mortar retail lenders as consumers embrace mortgage technology. Digital lenders today can make home financing easier, faster, more convenient, and sometimes cheaper. As a result, numerous retail lenders will need to develop similar services to compete for modern homebuyers.

This [trend] also affects realtors. The emergence of digital platforms where buyers can view listings and realtors may display ratings shows that digital is here to stay for realtors. There is evidence that real estate transparency, aided by digital tools, benefits both individuals and cities.

Professionals will continue to be vital in assisting consumers with their home purchases. Professionals should strive to make the process transparent and comfortable even when no one is present. Lenders must consider the entire client journey. Homebuyers likely prefer platforms that solve many pain points – vast realtor networks, digital flow and ease of use, and equal service.

Imani Francies

Imani Francies

Imani Francies is a mortgage lending expert with Clearsurance.com.

API Use, Machine Learning, and Artificial Intelligence

Increasing API Use

Mortgage lenders can increase their productivity by utilizing application programming interfaces (API). (Workflow automation, data accuracy, and regulatory compliance are just a few examples.) When it comes to earning a profit, streamlining the back office with the right technology is critical. Inefficient back office processes influence loan processing times and loan officer morale, as well as the salability of loan products in general.

Machine Learning and Artificial Intelligence

Machine learning (ML) and artificial intelligence (AI) can help make the often document-intensive process of applying for a house loan much easier. According to the Infosys research, the operations that may be improved with the use of these technologies include document management, analysis, and assessing borrowers’ capacity to pay even when credit history data is unavailable. Lenders may utilize AI to construct a chatbot mortgage consultant that can give information based on financial and product suggestions.

Leonard Ang

Leonard Ang, CEO of iPropertyManagement.

Automation and Shifting Interest Rates

The emerging trends in the mortgage lending industry are automation and shifting interest rates due to the pandemic. Mortgage lending is going to become more and more automated as we introduce more technologies into our office spaces. There is a lot of paperwork and background checks that go into mortgage lending. Through automation, this process will be quicker and more accessible to people. Interest rates have been notoriously low for the past year or two, and I see this continuing for at least the next few years, and so homebuyers are in a great position to pounce on a home!